Interest is a fee A fee is the price one pays as remuneration for services, specifically payments to a doctor, lawyer, consultant, or other member of a learned profession. Fees usually allow for overhead, wages, costs, and markup paid on borrowed assets. It is the price paid for the use of borrowed money,[1] or, money earned by deposited funds.[2] Assets In financial accounting, assets are economic resources owned by business or company. Anything tangible or intangible that one possesses, usually considered as applicable to the payment of one's debts is considered an asset. Simplistically stated, assets are things of value that can be readily converted into cash . The balance sheet of a firm that are sometimes lent with interest include money Money is anything that is generally accepted as payment for goods and services and repayment of debts. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value, and occasionally, a standard of deferred payment, shares In financial markets, a share is a unit of account for various financial instruments including stocks , and investments in limited partnerships, and REITs. The common feature of all these is equity participation (limited in the case of preference shares), consumer goods In economics final goods are goods that are ultimately consumed rather than used in the production of another good. For example, a car sold to a consumer is a final good; the components such as tires sold to the car manufacturer are not; they are intermediate goods used to make the final good through hire purchase Hire purchase is the legal term for a contract developed in the United Kingdom and now found in China, Japan, India, Australia, and New Zealand. It is also called closed-end leasing. In cases where a buyer cannot afford to pay the asked price for an item of property as a lump sum but can afford to pay a percentage as a deposit, a hire-purchase, major assets such as aircraft Aircraft finance refers to financing for the purchase and operation of aircraft. Complex aircraft finance shares many characteristics with maritime finance, and to a lesser extent with project finance, and even entire factories in finance lease The U.S. Financial Accounting Standards Board and the International Accounting Standards Board announced in 2006 a joint project to comprehensively review lease accounting standards. In July 2008, the boards decided to defer any changes to lessor accounting, while continuing with the projects for lessee accounting, with the stated intention to arrangements. The interest is calculated upon the value of the assets in the same manner as upon money. Interest can be thought of as "rent Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another person or company. The owner of the good, service or property may be referred to as the lessor and the party paying to use the property as the lessee or renter. The rental market has recently expanded to cover a diverse variety of of money". When money is deposited in a bank, interest is typically paid to the depositor as a percentage of the amount deposited; when money is borrowed, interest is typically paid to the lender as a percentage of the amount owed. The percentage of the principal that is paid as a fee over a certain period of time (typically one month or year), is called the interest rate An interest rate is the price a borrower pays for the use of money they borrow from a lender, for instance a small company might borrow capital from a bank to buy new assets for their business, and the return a lender receives for deferring the use of funds, by lending it to the borrower. Interests rates are fundamental to a Capitalist society[.
Interest is compensation to the lender , and for forgoing other useful investments Investment is the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value. It is related to saving or deferring consumption.[citation needed] Investment is involved in many areas of the economy, such as business management and finance no matter for households, firms, or governments. An that could have been made with the loaned asset. These forgone investments are known as the opportunity cost Opportunity cost is the next-best choice available to someone who has picked between several mutually exclusive choices. It is a key concept in economics. It is a calculating factor used in mixed markets which favour social change in favour of purely individualistic economics. It has been described as expressing "the basic relationship. Instead of the lender using the assets directly, they are advanced to the borrower. The borrower then enjoys the benefit of using the assets ahead of the effort required to obtain them, while the lender enjoys the benefit of the fee paid by the borrower for the privilege. The amount lent, or the value of the assets lent, is called the principal. This principal value is held by the borrower on credit Credit is the provision of resources by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay or return those resources (or material(s) of equal value) at a later date. It is any form of deferred payment. The first party is called a. Interest is therefore the price of credit, not the price of money as it is commonly believed to be.[citation needed]
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Tehran Times
Using an analogy by Paddy Hirsch, senior editor of Marketplace, the Fed stimulus in terms of interest rates looks like someone driving a car with the ...
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